How Data Privacy Rules Force us to Go Back to Basics

Transcription

Siobhan: Welcome to the only actionable podcast to help you unfuck your marketing and run a business that gives a shit. I'm your host Siobhan and this is Marketing Unfucked.

Are you ready for the new privacy regulations in Canada? We discuss it with Derek Lackey. Let's do this.

Derek, how do we unfuck marketing?

Derek: Well, that's a huge question because I think marketing has painted itself into a corner that has nothing to do with the C suite anymore. I think that we have become digital executioner's instead of strategic marketers.

We've allowed ourselves to become online lead generators. It's what I would call pre-sales activity and it has become marketing's whole reason for being and I'm seeing it in so many companies, and it just boggles my mind.

Siobhan: Can you give me an example of where you have seen this occur?

Derek: I see this everywhere. I’ve talked to marketers and when I ask them what their key role is, it seems to be to generate leads for the sales team.

Siobhan: What do you think the role should be?

Derek: Strategically positioning the company to win and produce results.

Siobhan: And that's not the same thing?

Derek: No because if you strategically position the company, you're taking care of the four P's of marketing, and they still apply. You’re picking the right distribution channels. You're getting the product right. If you look at what Steve Jobs did with Apple, it was a combination of brilliant marketing on all four P's. He got the product right. His promotion was brilliant. They were focused. He picked the right channels. He developed his own retail channel, and his pricing was always premium - and we all paid it gladly.

Look what they're getting for an iPhone. They're getting for an iPhone, what we used to pay for a portable computer. That’s strategic marketing well executed. When you take away the strategic part, all you get is well executed. I believe that most marketers have fallen into that trap of chasing leads on digital instead of taking care of business. As a result, we're kind of out of the C suite. I was just interviewed by a 600-person company, who have zero marketing people in the organisation.

Siobhan: So, what are they doing?

Derek: Selling. They got one marketing person in their content division, and their job is to generate leads. It just boggles my mind that we've allowed ourselves to be shuffled there. You know, we talked a little bit about the origins of this shift, and I believe that all marketers in the late 90s, as digital marketing started, had a mass marketing mindset.

So, all the marketers in charge in 1998, when we started down the road of digital, they thought the game was about more eyeballs. You and I now know, 20 years later, with the huge advantage of hindsight, that the digital channel is about engagement. It's not about more eyeballs. You don't get more eyeballs till you get engagement. When you get engagement, you can scale. But until you get engagement, going after eyeballs just makes people go away online. They ignore you. It’s like sticking an ad in someone's Facebook feed. They hate it.

Siobhan: What can we do other than that?

Derek: Well, they liked it when the ads were down the side and they could ignore them or include them. They hate that it's in the feed. They hate that the first five suggestions in any Google search is paid ads. I don't know any consumer who likes that.

Siobhan: So, what do we do? Do we just go back to the old way?

Derek: I think we should divide marketing and digital marketing. As a CMO, I would put digital in sales. A digital marketing team that generates leads, that's pre-sales, that belongs over with the sales department. That's not marketing. And I wouldn't let my company collapse marketing into legion. I keep pushing back out. It's strategy, it's driving the business, it's developing product, it's picking the right channels, it's pricing the product, and it’s promoting really well. It's all the things that marketing should be, not just generating leads online for the sales team.

Siobhan: So, what should marketing be?

Derek: If it was going to lead with anything, it should lead with advertising.

Siobhan: So how do we market while bringing in the privacy aspect of things?

Derek: It was about consent. In a world where the consumer doesn't want to give consent, and businesses need to have consent, it's going to force the average business into back into more traditional advertising - television, magazines, newspapers, billboards, etc. traditional ways of getting your brand in front of the customer, rather than wholeheartedly depending on digital to do the job.

Siobhan: But don't we have a better chance of trying to gain our consumers consent, than trying to go back to the old ways of marketing?

Derek: Yeah, and do you know how we're going to gain to consumers consent?

Time.

And, we need to have the right actions over that time. So, we're gonna have to stop abusing their personal data, doing whatever the hell we want with it like we've done for 20 years, forgetting that there was a person on the other end of that personal data. We have to start respecting that. It’s going to take time.

Eventually, consumers are going to be privacy savvy enough and I think they're beginning to become privacy savvy now. I think they're going to eventually become privacy savvy enough to know which brands they can trust with their data, and which data and which brands they can't. And the ones they can’t are going to have no choice, they're going to have to go back to what I call more traditional methods. It'll be illegal to communicate with them digitally, unless you have consent.

We have a new law here in Canada that's just kicking in this September, that if you don't have consent, or you don't have a contract with the person, you cannot communicate with them.

Siobhan: Is that going to help our marketing? We only get about 30 ro 40% consent.

Derek: No, it’s not going to help our marketing. It is going to force our marketing in a different direction.

Siobhan: Is that a good thing or a bad thing? Because if it doesn't help us, isn't it a bad thing?

Derek: No, I just think we've gotten into some really bad habits using people's data without their consent and without their knowledge. So, it's even further back than consent. They don't even know what we're doing with their data and we have to stop it.

Siobhan: So, you're suggesting it’s a good thing that we're not going to be able to track them? This law is just in Canada, correct?

Derek: GDPR is the same law except it allows for legitimate interest. 90% of business is done under legitimate interests. Any company that's got a national database in Canada and operates across Canada is going to have 20 to 25% of their list from Quebec. So, in the same way that California dictates how you operate in the US, Quebec dictates how you operate in Canada, because they set the highest privacy bar. And yes, they're going to force people to rethink their marketing.

Siobhan: How do you think it's going to force us to rethink our marketing so we're not getting consent? Do you think what's going to happen is like what happened with GDPR? You know, suddenly no American site wanted to work in Europe for a while, are people just going to leave Canada out? Or do you think people will adjust?

Derek: We have too large an economy to just ignore it. We have a decent enough consumer marketplace here that you're not going to just ignore it.

Now there is one little out they allowed on the Quebec law and that’s that they don't consider your business role, your business email address or your business mailing address as personal data. So, there’s an out for B2B marketing, but all B2C Mark and B2B B2Cmarketing is going to be captured by this law.

Siobhan: So then how do we adjust our B2C marketing for the Canadian audience?

Derek: I think you go back to more traditional advertising, and you depend less on social media and digital advertising.

Siobhan: Can't we just advertise digitally and not track it?

Derek: Yes, we could do it without the personal data and do it more contextually. So that if you want to reach a certain demographic, and you know they watch curling, then you advertise around curling. That's exactly how we used to do it. We didn't know you personally. But we knew you liked curling, and we could reach you through advertising around curling.

The other thing I think that we've really screwed up is that creative is gone for a complete dump. Creative doesn't exist in digital advertising.

Siobhan: Explain what you mean by creative.

Derek: Traditional ad creative with some really good thinking put into the campaigns. I'm not seeing any good thinking with most of the digital stuff I'm seeing.

Siobhan: I'm just wondering, how does that actually help the consumer?

Derek: When it comes to things like toothpaste, for example, most consumers don't give a damn. They just buy whatever's on sale, whatever is familiar to them, but they don't give a damn for the most part.

It's not like a major decision, like buying a car or buying a house. They give a damn about that stuff. But buying a tub of toothpaste who cares?

Siobhan: Do they? Because if the toothpaste differentiates itself enough, maybe they do care? Maybe they will go for something that stands out?

Derek: Yeah, but we haven't seen it in years. They're all just so close and they're so interchangeable.

Siobhan: And do you think that's the problem with what's happening currently? Are people are getting lazy with their marketing because we have so much data?

Derek: Very much. They're depending on data instead of creative. They don't value good creative, and it gets worse, they gave up the 15% commission that allowed for creative to be really good. When I had my ad agency in the 90s, we were a full-service ad agency and most of our margin was made on the 15% agency commission. It allowed us to invest heavily in creative and good strategy and sound media buying. You go into these programmatic buying today? Gosh, I think even the folks on the programmatic desk don't know what they're buying.

Siobhan: How do we benefit from it? Let's say we're not marketers, and we are the consumers. I personally feel that I would like some personalization if I trust the company with my data. I would like to not be mass marketed to. But ultimately, what some of this is doing is telling us to mass market again. I feel like that's not helping the consumer in any way and then this is just going past what it should have done.

Derek: I think we will get back to where you're talking about. But it's going to take a while until the consumer trusts. It’s going to take time. I think that eventually that one-to-one personalised messaging will be valuable and will be done by certain brands. But others still won't get it. They still want to hammer people over their head on digital marketing in places where people really don't appreciate their messages.

I know when somebody texts me that I don't know, it pisses me off. We all have a channel, like you've got a Facebook account where ads come in your feed that pisses some people off. I personally don't have a Facebook account. I had one for years because I have a daughter in California, and she posted frequently about her children, my grandkids and I loved keeping up on Facebook. But at some point, I just couldn't live with what they do around privacy and personal data. So, I scrapped it about a year ago. I don't know what annoys you on Facebook nowadays, but I know what used to.

Siobhan: Yeah, I don't go on Facebook anymore so it's hard for me to be annoyed by it but I do feel like we've (the marketing industry) have gotten lost in this discussion around privacy laws, GDPR, the California laws, and now Quebec coming up. Everyone is really pushing from the outside and lawyers are essentially trying to force marketers into certain actions.

I feel like the whole idea behind it got lost. How would you recommend we market in Canada, starting in September?

Derek: I think we need a blend of digital marketing using context instead of personal data and we need to go back to more traditional forms of advertising.

Siobhan: So, give us some concrete ‘how to’s’ because anyone listening to this right now is going to think - wait a second, what just happened in Canada? And, they have an audience there… what can they do now to prepare themselves for September?

Derek: Well, they can start by finding a system for collecting consent, because we've never had to prove it before. Most of us don't have a system for collecting consent such as a consumer preference centre.

Siobhan: So, you're not talking cookie banners, you're talking about something else?

Derek: Yeah, I'm talking about a preference management solution that you can attach to your website so that your consumer can go in and turn off and, on their consents, as they please. It's plugged into all of your systems. So, if I tell you, you can email me this, but don't email me that, it goes directly to your email provider.

Siobhan: So, you're essentially thinking a privacy dashboard would be needed?

Derek: It's a consent management tool.

Siobhan: Are there any consent management tools out there?

Derek: Yeah, we've partnered with a group in the UK called Syrenis. They have a platform called Cassie and it’s absolutely brilliant. Once you put it in place, it manages consent. As long as you're being a good doobie, and taking care and respecting your consumer, your consent will go up. And your marketing options will go up. But right now, we screwed the pooch on the first 20 years of digital marketing, and we’e got to clean it up.

As the chairman of the response Marketing Association here in Canada, it's been clear to me for a few years that we've done that and we're resisting any change. They fly in the face of the GDPR. The IAB has the nerve to interpret the GDPR with the TCF framework. I remember when I read that the first time I went - You guys are just sticking your head in the sand and when you stick your head in your sand, your ass is way up in the air to get kicked. Right?

Siobhan: In terms of marketing, how does a platform like Cassie ultimately help us? Is it going to be able to allow users to control their privacy settings at their whim and at any time they would like?

Derek: Simple math says that if a company goes to that length to allow me to manage my own consent, I can trust that they're going to honour my consent, right?

It’s so those kinds of companies who take it seriously that will get ahead. They’ll be the first ones to be able to use digital marketing the way we all dreamed it could be used. But it can't be used that way if we keep abusing people's data, because it's just going to keep going south.

Siobhan: So you think that if any company who does a good job essentially at allowing people to track where they're being tracked with a consent management platform, then it automatically imply that we can trust the company and therefore you think we'll have a higher consent rate?

Derek: No, it's the first of many building blocks. It's the first step. I'm a consumer and I go, ah, that company is using consent management, they at least take consent seriously. That's one for them. I need to see many more good actions from that company before I fully trusted them. But that's a nice first building block.

Siobhan: So, what's the next action that we want to see?

Derek: I think the next action we want to see is the businesses actually cleaning up their act and stop using people's data in whatever way they want, and start using it only for the purpose limitation they asked for consent for, which is what GDPR and all these new laws are asking for.

Siobhan: You’re implying that businesses are not doing that?

Derek: Oh, gosh, they've not been up front at all.

Siobhan: Even with GDPR in place?

Derek: Oh, yeah because they're all trying to find the edges of GDPR. I'm an expert on Castle, which is our Canadian anti-spam law here. I've written the only private sector book on Castle and how to operationalise against it. It’s amazing to me how many companies are absolutely zero Castle compliant.

Siobhan: But how are they getting around it? Like, isn’t it at least smart getting around it?

Derek: I get more calls asking me to teach their team workarounds than to bring the company into compliance. Think about that.

Siobhan: Yeah, I can see that. I get clients calling me up too and asking how can we get around GDPR? But it makes me wonder, do you think that's all we're gonna have to see happen in September for Canada?

Derek: I'm gonna get my crystal ball out here as a marketer and a privacy expert. I think the way it's going to go is when the market realises what's going on, and what they're going to have to do, there’s going to be such as humongous backlash, that the government's going to have to consider adding legitimate interest. It’s too much too soon.

I think they're right in what they're doing. But it's too heavy handed, too soon. The EU had the smarts to say, okay, consent, contractual and legitimate interest. You have to have a lawful basis for processing. You can pick any one of the three and they even recommended that a legitimate interest be considered first. If you can write a legitimate interest balancing test, you can use legitimate interest.

Now we're seeing cases where the CNIL and Spanish authorities have not agreed with the legitimate interest assessment of companies. And therefore, the entire consent structure of that company just fell apart because they built everything on legitimate interest that was misapplied.

Siobhan: Yes, and this can happen, of course. But I'm still a bit shocked. You're thinking that there's going to be a backlash, right? Is there already some kind of inkling of a backlash now?

Derek: No. The average business doesn’t even know about this.

Siobhan: Are there any marketers who know it? Is there nothing? Is it just loyal and legal right now?

Derek: Pretty much. As we get closer to the coming into force date in September, you're going to get a little more publicity. The lawyers and the consultants like us are going to have a clear handle. We're shouting from the rooftops about it. We’re doing a webinar every month on consent and the new rules for applying them in Canada. We're starting to get some people going – what?

Siobhan: Wait, are you hoping for backlash? Are you leading a revolution?

Derek: I would love to see this law stand and force marketers into cleaning up their act fast. Now, is it fair? Probably borderline, it’s pretty heavy handed only allowing consent and contractual. It’s pretty heavy handed. But we'll see how it goes. It’s going to be interesting.

Siobhan: How long are you giving it out?

Derek: The government never moves fast. So, I'm gonna say at least six months.

Siobhan: When does this actually get enforced in September?

Derek: It comes into force in three stages. Starting this September, three or four things come into force. Next September, a year and a half from now, almost everything comes into force in the second one.

Siobhan: So, we have a year to chill and we can still mark it the way we want to?

Derek: Yeah.

Siobhan: I'm already trying to figure out how to get away with it you see.

Derek: But here's the thing. Do you do it based on legal compliance, or do you do it based on what's best for your customer?

Siobhan: I think if you do it what's best for the customer.

Derek: I think if you're a good marketer, you certainly do.

Siobhan: But I think that all this legal oversight is hurting the relationship with the customer and it’s penalising the marketers who are focusing on the customer. This is why I'm having a hard time with it. I'm not against it but I'm having a hard time.

Derek: For years, we self-regulated in the ad business and marketing business. We managed ourselves so we never ran into this, and we got greedy. When the 15% agency commission disappeared, we had to panic for revenue as agencies and marketers. Suddenly, things started to erode and change.

It all started with the elimination of the 15% agency commission. Advertising agencies are not on the client’s team anymore. In the 90s, my job as an ad agency was to take care of my client. I had to make sure that when they bought a media, they got what they were promised. I had to make sure that their creative strategies for going to market was solid. That was our job.

We were always on our client’s team. And today's agencies, who run their own programmatic desk, they're screwing their client knowingly. They're actually taking advantage of their client instead of protecting them. Like, who's protecting the client today? From the marketplace? It used to be the agencies, but they've stopped. They're in on it.

Siobhan: But I don't think it should be government's either.

Derek: Then who if we're not going to self-regulate?

Siobhan: So, if you had a magic wand and you can fix the problem, what would be the solution?

Derek: I would go back to 2003 and heavily regulate Facebook as to what they can and can't do with data.

Siobhan: Only Facebook?

Derek: Predominantly Facebook, but Facebook and Google.

Siobhan: And that would fix the problem?

Derek: That would go a long way. We would set industry codes of conduct that say you can't do this stuff with people's data. But we took the position as businesses, that if we collected that data, it was ours. We forgot that it was attached to a person, that it was actually the personal information of an individual.

I think that's why we're in the soup we’re in now, plain and simple. We thought we owned it and could do whatever we wanted with it. We're learning now like, oh, they own it, and we actually have to ask their permission. That's a little more respectful.

Siobhan: It's definitely more respectful. Ultimately, I still stand by the fact that I don't think we'll be heavy handedly ruling everyone.

Derek: But what's our choice? We've screwed it up so bad. The government has to mandate that we take care of our customer. Isn't that marketing's role - to take care of the customer, to represent the customer inside the company and always have the customer first?

Siobhan: When do you think we'll reach an equilibrium? You know, where government doesn't have to be so heavy handed and apply any kind of laws - and marketers will start self-regulating themselves. Do you think we'll ever get there?

Derek: Yeah, I do. I think we're at the midpoint of the consumer understanding the value of privacy and what they will and won't allow. The consumers are just waking up to what's being done with their data, and what's okay with them and what's not okay with them, and we all have a different threshold. You have a very different threshold of what you would allow people to do with your data than I do. I think that every individual should get to express their own.

As marketers, we should honour that. So back to this preference centre conversation. If you turn your preferences off and on and I honour them, we’re starting to rebuild a relationship because you can trust me as a brand. Because I actually only do what you asked me to do.

Siobhan: It always comes down to the same thing, right? Give the customer what they need and respect them.

Derek: And being honest. In my humble opinion as a marketer, and I've been passionate about marketing all my life, I've watched it deteriorate to a point that marketing's become a lead gen off in the corner to oh, you want more money? No. You’re not generating enough good leads.

Siobhan: Oh, man. Oh, man. We're gonna leave it at that. Thank you very much Derek.

Thank you for listening to Marketing Unfucked. All resources mentioned in today's show can be found in the show notes. Like the show? Leave us a review or send me some feedback. See you in two weeks.